Decline of Industrial Activity and Its Impacts
What is Deindustrialization?
Definition
Deindustrialization
Deindustrialization is the long-term decline in employment in the manufacturing sector of an economy. It involves a loss of jobs rather than a decline in productivity.
Deindustrialization is not just about factories closing, it’s about the ripple effects on economies, societies, and populations.
Causes of Deindustrialization
Globalization
- Offshoring: Companies move production to countries with lower labor costs.
- Competition: Cheaper imports reduce demand for locally manufactured goods.
Technological Advancements
- Automation: Machines replace human labor, reducing the need for workers.
- Efficiency: Fewer workers are needed to produce the same output.
Urban Land Prices
- High Costs: Rising urban land prices push industries to suburban or rural areas.
- Space Needs: Factories require large spaces, which are often more affordable outside cities.
Detroit: The decline of the auto industry led to massive job losses and a shrinking tax base.
Social Impacts
- Rising Unemployment: Job losses increase poverty and inequality.
